Coca-Cola Struggles Amidst Turbulent Market Conditions

  • Effects of pandemic, sugar tax, inflation and weather conditions impact performance cited


The Coca-Cola Beverages Botswana (CCBB) team faced a tumultuous year in 2022 as they grappled with various challenges that hindered their ability to meet business plan targets, the 2022 annual report of Sechaba Brewery Limited Holdings shows.

Despite recording higher volumes in 2022 as compared to 2021, CCBB fell short of their ambitious goals, thanks to the lingering impact of the Covid-19 pandemic, the government’s sugar tax policy, high inflation rates, and escalating commodity prices as major contributors to their struggles.

“This resulted in a difficult customer and consumer environment for the team,” says CCBB General Manager, David Chait, in the report.

Heavy rains

“Along with these challenges, the team also faced the added challenge of heavy rains and/or thunderstorms during large portions of both Quarter 2 (Q2) and Quarter 4 (Q4), finding it difficult to meet targets set for those affected months, and thereby crippling volume aspirations.

“Following underperformance in the first three quarters of 2022, CCBB then delivered an improved Quarter 4 with volumes growing against 2021. Unfortunately, this was still unable to achieve Business Plan (BP) targets for both the quarter and year.

“By close of the year, CCBB delivered new Botswana record high volumes of 20.4 million Unit Cases (UC), +2.5 percent vs 2021, but below BP targets, -7.4 percent.”

Chait says the Botswana sparkling portfolio continued to be the largest category in the business, contributing to 86.7 percent of total volumes, a significant +0.3 percent vs BP targets, of which 1.3 percent were Diet, Light or Zero (DLZ) products.

Core brands

“Sparkling was, again, driven by the core brands, and in particular, Brand Coke, with the three brands’ combining to a contribution of 83.2 percent of total SSD volume,” he notes.

“SSD final volumes of 17.3 million UC were -6.0 percent v BP despite Brand Coke, showing gains throughout the year, closing above prior year (PY) targets, +4.8 percent vs 2021.

“The Flavours portfolio, and in particular, the Fanta brand, continued in its 2021 struggles. Both Fanta, the driving Flavour brand, and Sparletta/Twist delivered below 2022 targets, closing -26.5 percent and -9.3 percent vs BP respectively.

“The CCBB Trade marketing team continued its excellent work in trade, supporting the sparkling category throughout the year and maintaining visibility in trade through promotions and activations.”

2L Sparkling Soft Drink

Remarkably, the 2L Sparkling Soft Drink (SSD) pack emerged as the primary driver of final volumes, despite experiencing a decline in volume.

It contributed to 58.1 percent of the total volumes recorded in 2022. After a slow rate of sale in the initial three quarters, Q4 witnessed a substantial recovery, culminating in a strong finish for the year.

The final quarter of 2022 marked the completion of the transition from 330ml/440ml cans to the slimline 300/400 cans for SSD products.

“Despite this, total SSD Can contribution rose a strong +2.3 percent in 2022 vs 2021 closing at 19.6 percent,” Chait notes in the report.

“The 400ml/440ml Can in particular, showed significant growth, closing +12.7 percent vs BP targets, as consumers seem to be looking at more value packs, having a very positive effect on the year’s profitability.”